The size of the Californi’s affordable-housing shortfall shrank slightly as more housing was built, wages improved or low-income residents moved to areas with more affordable housing, the report showed. And more state funding for housing programs is on the way within a year, thanks to $6 billion in housing bonds voters approved last November. Seen here is Clark Commons, a 70-unit multifamily property in Buena Park in Buena Park. The affordable housing development, on a former Public Works yard, is part of a 10-acre site that includes a park and The Parker Collection, 128 solar-powered townhomes and lofts developed by City Ventures. (Photo by Leonard Ortiz, Orange County Register/SCNG)

Fewer than a third of low-income families have access to housing they can afford in Southern California, a housing advocacy group reported Tuesday, May 21.

The report shows a shortfall of nearly 759,000 units affordable to low-income renters in Los Angeles, Orange, Riverside and San Bernardino counties as of 2017, according to the California Housing Partnership, a state-created nonprofit dedicated to promoting affordable housing.

At the same time, state and federal funds for building or preserving low-income housing in the four-county region decreased by almost $900 million, or 75%, from 2009 through 2018.

The good news is the size of the affordable-housing shortfall shrank slightly as more housing was built, wages improved or low-income residents moved to areas with more affordable housing, the report showed. And more state funding for housing programs is on the way within a year, thanks to $6 billion in housing bonds voters approved last November.

Housing advocates say, however, the bond programs, approved under Propositions 1 and 2 last year, won’t be enough to offset the $1 billion a year lost when the state abolished more than 400 redevelopment agencies in 2012.

“The headline in each of these key findings is there’s less funding,” said Alan Greenlee, executive director of the Southern California Association of NonProfit Housing. “What the data suggest is the state and the feds need to step up.”

The bottom line, according to the report, is the typical household in Orange County needs to earn at least $7,400 a month to afford the median asking rent of $2,225 a month, while in L.A. County, the minimum income needed is over $8,200 a month to afford the mid-priced asking rent of $2,471. Many economists consider a home affordable when it costs no more than 30% of a household’s gross income.

That translates into a wage of $43 to $48 an hour to afford the average rental in the L.A./Orange County area.

In the Inland Empire, residents need to earn at least $5,250 to $5,667 a month — or $30 to $33 an hour — to afford median rents ranging from $1,575 to $1,700 a month.

That’s at least 2½ times the state minimum wage, far outstripping the hourly pay for janitors, housekeepers, home health aides, childcare workers and retail salespeople, the report said.

“There’s a huge imbalance in the types of jobs we’re creating and the cost of housing,” said Cesar Covarrubias, executive director of the Kennedy Commission, an Orange County affordable housing advocacy group. “The vast majority of families won’t be making the incomes needed to live here.”

The biggest impact is on the region’s poorest renters – those earning less than 35% of their county’s median income. Three-fourths of the households in this income segment spend at least half of their earnings on rent, making them susceptible to homelessness, the report said.

For example, recent counts show the fastest growing segment of homeless residents includes those at the bottom of the income spectrum, or the “economically vulnerable,” Greenlee said.

“They got jobs, they’re paying their bills, but for whatever reason, their rent went up, they had a hiccup or a car (repair) payment, and they’re out,” he said.

Greenlee said U.S. Housing and Urban Development funding for the acquisition and construction of below-market housing has been decreasing steadily over the past 15 years.

Over the past nine years, for example, HUD funding for building affordable housing in the four-county area decreased by almost $94 million, a 26% drop, housing partnership figures show.

Meanwhile, the Tax Cuts and Jobs Act adopted in December 2017 curbed the number of dollars flowing into tax credit programs that buttress the construction and preservation of subsidized housing, Greenlee said. By reducing corporate taxes, banks and institutional investors need fewer tax credits. And the value of each credit also was reduced under the GOP tax plan.

“So, we’re still in a resource-restricted environment,” he said.

The housing partnership urged the state to replace the redevelopment funding that evaporated in 2012 – a proposal under review in the Legislature. It also called on the state to expand the affordable housing tax credit program by $500 million a year.

On the local level, the housing partnership urged cities and counties to adopt rent caps and tenant protections while incentivizing construction of more affordable housing by giving developers density bonuses.

Greenlee said local governments need to encourage construction of all types of housing as a way to provide more housing for low-income residents.

“Everybody’s got to have their oar in the water working on the solution,” he said.

For more than a decade, Jeff Collins has followed housing and real estate, covering market booms and busts and all aspects of the real estate industry. He has been tracking rents and home prices, and has explored solutions to critical problems such as Southern California’s housing shortage and affordability crisis. Before joining the Orange County Register in 1990, he covered a wide range of topics for daily newspapers in Kansas, El Paso and Dallas. A Southern California native, he studied at UC Santa Barbara and UC Irvine. He later earned a master’s degree from the USC School of Journalism.

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